SC Capital Proposes $252M, 55-Storey Hotel Tower in Sydney

Singapore’s SC Capital Partners has filed a proposal to redevelop a commercial building in downtown Sydney that it bought in 2015 into a 55-storey hotel and office skyscraper. The real estate private equity firm is angling to redevelop the site with a 205 metre tower – among the ten tallest in the city – costing A$311.8 million ($252.2 million), according to the documents cited by Australian media.

The proposed project, called the Bligh Hotel Tower, would feature 37 levels of a four- to five-star hotel with 407 rooms, above a 10-storey podium for commercial offices, entrance lobbies and other facilities. The project would span 24,825 square metres of gross floor area including 6,137 square metres of grade A commercial space. Design studio Architectus prepared the proposal for the city council, according to a separate news account.

The current 18-storey building, Bligh House, is located at 4-6 Bligh Street at the northern end of the city’s core business district. The property borders Circular Quay on Sydney Harbour, where a number of new developments are ongoing, including the $1 billion One Circular Quay mega-project that China’s Dalian Wanda Group recently agreed to sell. SC Capital did not respond to inquiries from Mingtiandi requesting further details by the time of publication.

Bringing Some Relief to Sydney Hotel, Office Market

SC Capital originally bought Bligh House through its $850 million Real Estate Capital Asia Partners IV (RECAP IV) fund, in partnership with Aussie investment firm Fortius Funds Management. The duo acquired the 1964-vintage building in July 2015 for A$68 million ($50 million) from Cromwell Property Group. The building has since been occupied by New South Wales government agencies, generating about A$5 million ($4 million) in net annual income.

The proposed project is expected to ease a shortage of both grade A office and hotel space in the downtown Sydney market. Hotel occupancy rates are reported to average about 90 percent in the city, straining operational capacity, on the back of a 4.3 percent jump in room demand over the past year. Supply of rooms grew by only 3.1 percent during the same period.

Office vacancy has tightened to a ten-year low of around 5.4 percent as of December, according to figures from brokerage JLL.

Singaporean Fund Manager Deepens Aussie Commitment

SC Capital appears to be a fan of Australia’s largest city, having teamed up with Fortius to buy the office tower at 59 Goulburn Street in Sydney for A$158 million last July. The Singapore-listed seller, Roxy-Pacific Holdings, had won approval to redevelop the site into a 38-storey mixed-use tower providing a hotel, residential apartments, retail and office space.

SC Capital also owns the 14 Meredith Street apartment building in Bankstown, a southwestern suburb of Sydney, which is on sale for about A$80 million ($64.7 million). In addition to its Aussie investments, the company chaired by Suchad Chiaranussati is active across Asia, including Myanmar where it has made at least four bets on residential and hotel properties.

Last December the firm was reported to have raised $383 million for the first close of its Real Estate Capital Asia Partners V (RECAP V), the fifth in its series of Asia opportunistic vehicles. Launched in August with a target of $1 billion, the fund is expected to have its final close toward the end of the second quarter of this year.

SC Capital has raised just under $2.3 billion in commitments from institutional investors, according to its corporate website.